Philippine Daily Inquirer on Jollibee's Tony Tancaktiong: This Jolly man deserves his 'langhap sarap' success

This Jolly man deserves his 'langhap sarap' success
Posted: 8:54 PM | Jun. 26, 2004
Margie Quimpo-Espino
Inquirer News Service

A FEW months ago, Jollibee Foods Corp. founder Tony Tan Caktiong was sitting beside a lady who was telling him about her meetings with top leaders like the Emperor of Japan and even President Gloria Macapagal-Arroyo.

He politely asked who the lady was and was told she was a Rockefeller in charge of the Foundation of one of the richest families in the US.

At that time, Tony Tan was in a bit of a quandary. Jollibee had become international food firm and had beaten McDonald's in the Phillippines as the number one hamburger chain in the country. Its overseas expansion had been set in place and its local acquisitions seem to be dominating in their respective niches.

Tan, whose family could not even afford to go to then, already had enough personal wealth to set him for life.

The problem was friends had been prodding to do more social works and a part of him wanted to do so.

But the Rockefeller heir told him, "If you focus on your business and you do good, that's charity because you employ people and you generate revenues for your country. People think that charity is just attending socio-civic activities and raising funds. If you do that and your business goes down, people will lose their jobs."

Tan says those words set him straight and although he can leave his job right not and not go hungry the rest of his life; and although his wife wants him to retire and enjoy their fruits of their 25 year labor, hanging his coat is still far from the 53-year-old's mind.

Entrepreneur of the year

Tan granted SundayBiz a rare one-hour interview recently. This came in the wake of his winning the 2004 World Entreprenuer of the Year award of Ernst and Young, one of the world's top accounting firms.

"It was shocking," says the chemical engineer graduate of UST of his feelings when the winner was announced. Jollibee bested 31 other entrepreneurs in the world including the US, Britain. Although Tan says they were not really told of their scores, he says the judges told him later that their decision was unanimous.

More surprising still was the stir the win created in the Philippines. Major newspapers (including the Inquirer) splashed their front pages with the story and a photo of a victorious Tan with his family.

"I was really surprised at the stir it created. My friends said it uplifted their spirits. And especially since this came in the wake of the win of Gerry Ablaza as Telecom CEO of Asia, and that student who won the speech contest, and before all these, Manny Pacquiao. . . "

Winning an international award was not really part of the vision of the Tan siblings when they set up a food venture 29 years ago. Although Tony says going international was.

Humble beginnings

Tony's beginnings are as humble as the lives of some of the people Jollibee serves everyday.

He is the second of seven siblings. His parents came from the Fujian province of China. His father was a cook in a Chinese temple. Which was why he and his siblings studied in a Buddhist school-the Philippine Sakya Academy. His father's employ was their ticket to getting an education. They were all given scholarships to study.

All of them did well in school and lack of money was not a hindrance to their getting top grades. Nor to enjoying life.

"We were poor but my mom did not make us feel we were. We had no new clothes but our clothes did not have holes. She made sure we did not beg. We could not afford going to movies so our enjoyment during weekends was going to Rizal Park and playing there. We did not have too much food but walang sayang (nothing was wasted). As a family, we did not feel poor. We managed to make ends meet."

When Tony was 11, his father was invited by a friend to set up a Chinese restaurant in Davao. The family packed their belongings and took a boat to the South.

By Grade 6 he was enrolled at the Davao Chinese High School where he finished secondary school. The restaurant did well. He and his brothers and sisters were made to help-just little things like bringing water to the customer. At times he admitted they created more mess than help but they all learned the restaurant business.

Tony had always excelled in math. He was among the top three best in Math in his school. His Math teacher told him, "If you want to pursue this and you want to go overseas, you go to school with a name."

He took his teacher's advice and took up engineering at the University of Sto. Tomas. He was the only one who studied in Manila. But plans of going abroad had to be shelved. He got married right after graduation and Tony says pressure to earn was immediately there.

Inheriting his father's entrepreneurial streak, Tony saw a poster in school about an ice cream parlor looking for franchisees. He decided to go into business. His father lent him the initial capital and he immediately set up two ice cream parlors-one in Cubao and the other in Quiapo.

Typical of Chinese families, his siblings went to Manila to help. He and his wife managed the Cubao branch while his brother and a sister handle Quiapo.

That was the era of the ice cream parlors-where families would have their chocolait parfaits or milkshakes, or the students would give their birthday treats.

Tony says the ice cream business did well. And being hands-on, they always talked to customers. "They would tell us, you know sometimes, we are hungry, we cannot just eat ice cream."

Guarded secret

The father's culinary talent came out in his children and Tony's sister had a good recipe for hamburgers. This was used and soon the sales of the burgers were outpacing ice cream.

Today this recipe remains a guarded secret. Only a few people in the company know and they are all required to sign a confidentiality agreement, according to Tony.

In 1978, the family decided to become a burger restaurant and changed its name to Jolly Bee from Magnolia Ice Cream House. After a few months, they shortened the name to Jollibee or happy bee with the animal symbolizing industriousness and spreading sweet things while moving around.

The choice of the word jolly is very appropriate to Tony who admits he rarely gets angry. "Mistakes don't make me angry but dishonesty does."

The bee has been working non-stop and today Jollibee has 467 branches with eight branches overseas including the US, Hong Kong and Brunei. It also has acquired other foods businesses-Chowking, Greenwich, Delifrance, Tom's Teriyaki and recently it acquired 85 percent of Yonghe, a fastfood chain in China with 91 branches.

In 1981, McDonald's the giant American burger chain, invaded Philippine shores. Tony says the US firm actually helped boost their business. Jollibee adjusted and adopted many of the systems of McDo.

Later on it adopted a two to one strategy-building two Jollibee outlets for every McDonald's branch. In 1981, Tony says they spent the whole year's profits on advertising.

What made him believe in marketing was observation. "I saw that all the big companies advertised. So I thought it must be right to do so."

But while they are ahead of McDo, he likens their competition to boxing, "McDonald's created competition and made us alert. We can't relax. The last punch can knock you down."

Asked how he has been affected by his success, Tony says "I enjoy it not in terms of money to spend but that I can create something."

He adds that the frugal yet comfortable lifestyle he had growing up has remained. And this has been acquired by two of his three children. And even her mother still expects the same conservative lifestyle.

"When we travel with my mom, and we book business, she'll complain. We tell her we want her to be comfortable but she replies that if she thinks of the additional expense she feels uncomfortable!"

His two children, who studied in the US, also complain if they are given business class tickets when they go home. His son who finished computer and business is now working in China; his eldest daughter has the desire to help people and is now teaching English in China. The youngest is still studying.

He can very well afford to buy the latest equipment for his new hobby-photography. His favorite genre is people. "I try to learn people but I don't have time!"

Tony admits raising of the children was left largely to his wife who had initially helped him in business. He says his wife still remains a valuable advisor in Jollibee although she no longer gets involved in the day to day operations.

On the whole, Tony says they were quite lucky at the growth Jollibee achieved. There is really no secret except taking to heart what his father told him decades ago, "If you're a tailor you make sure the shirt fits your client; if you're in the restaurant business, you make sure your food tastes good."

This is the secret of Jollibee-better tasting burgers and extremely crunchy chickenjoy (which actually sells more than the burger) than the relatively bland taste of its competiors. Thus the phrase "langhapsarap" has endured for over 20 years now.

copyright ©2004 INQ7money.net all rights reserved

The Prudent Investor: Not only is Mr. Tan reaping raves and plaudits in the media; in the stock market Jollibee shares are being propelled by foreign and local investors to new heights, as testament to Jollibee and Mr. Tancaktiong's success. Indeed, a toast for Mr. Tan!